As the week kicks off, USDJPY is facing a challenging battle to overcome the 20-period Simple Moving Average (SMA). Despite some positive momentum in the near-term, the bulls are finding it difficult to secure the upper hand in the 4-hour chart. Both the stochastics and RSI have shown signs of reversal to the upside, but the strength of this positive momentum remains questionable. The price has just managed to climb above the 20-period SMA but is facing resistance from the Tenkan-sen line of the Ichimoku cloud.
Obstacles Ahead for Bulls
In order for the recent rebound from near three-month lows to gain traction, USDJPY must navigate through several hurdles. The Kijun-sen line is looming above the 154.00 level, with further resistance at the 155.00 region. The next target for the bulls would be the 50-period SMA at 155.40 before attempting to re-enter the Ichimoku cloud. However, a loss of upside momentum could push the price back below the 20-period SMA, putting the pair at risk of revisiting the July 25 low of 151.93. A breach of this support level would reinforce the bearish sentiment in the short-term.
Medium-term Outlook
To paint a bearish picture in the medium-term, USDJPY would need to fall below its 200-day SMA, currently hovering around 151.62. While there is still a glimmer of hope for the bulls to solidify their recent rebound, there are significant obstacles standing in their way. The battle around the 20-period SMA continues to be a key battleground for control in the near-term. Bulls will need to muster strong momentum and break through the resistance levels to keep the upward momentum going.
USDJPY is facing a critical juncture as bulls struggle to regain control in the current market environment. The battle to overcome the 20-period SMA and navigate through key resistance levels will determine the near-term direction of the pair. While there is potential for a rebound to gain traction, the presence of multiple obstacles highlights the challenges ahead for USDJPY. Traders will be closely monitoring price action and key technical levels to gauge the strength of the bullish momentum in the coming days.